When an employer relies on a third party to run background checks on job candidates or existing employees, the screening firm must follow the Fair Credit Reporting Act (FCRA), and so do we!
FCRA Compliance Essentials can be listed as:
- Permissible Purpose – Ensuring the client is only ordering background checks for employment purposes. "Employment" is an extensive category that comprises hiring, retention, promotion, transfers, and can include volunteers, contractors.
- Agreement - In a written document, it is informed to the consumer that a background check may be obtained as a condition of employment. The disclosure can't be pooled with any other form excluding the authorization.
- Approval - Before doing a background check, we obtain a written consent from the client signed by the individual assuring that a consumer report can now be obtained and throughout the term of employment.
- Certifications - As a screening firm, we obtain the following sureties from our clients:
- They must get a candidate’s written authorization and receive acknowledgement that the background check may be used as a basis for employment decisions, such as hiring, promotion, or retention.
- Once the background check results are ready, a copy will be returned to the employer and, if requested, to the candidate. If the candidate disputes any records in the results, We can reinvestigate the records and provide updated results to both employer and candidate.
- They will not follow any hiring policy that disproportionately screens out minorities, including blanket bans on employment of people with criminal records as it may automatically be considered in violation of the Equal Employment Opportunity Commission’s (EEOC) guidance and requirements.
- If they make a negative employment decision based on information on the report, they will properly follow the compliance.
A Summary of Your Rights under the Fair Credit Reporting Act (FCRA)
The federal Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. Here is a summary of your major rights under the FCRA.
- You must be told if information in your file has been used against you. Anyone who uses a credit report or another type of consumer report to deny your application for credit, insurance, or employment – or to take another adverse action against you – must tell you, and must give you the name, address, and phone number of the agency that provided the information.
- You have the right to know what is in your file. You may request and obtain all the information about you in the files of a consumer reporting agency (your “file disclosure”). You will be required to provide proper identification, which may include your Social Security number. In many cases, the disclosure will be free. You are entitled to a free file disclosure if:
- A person has taken adverse action against you because of information in your credit report;
- You are the victim of identity theft and place a fraud alert in your file;
- Your file contains inaccurate information as a result of fraud;
- You are on public assistance;
- You are unemployed but expect to apply for employment within 60 days.
In addition, all consumers are entitled to one free disclosure every 12 months upon request from each nationwide credit bureau and from nationwide specialty consumer reporting agencies.
- You have the right to ask for a credit score. Credit scores are numerical summaries of your credit-worthiness based on information from credit bureaus. You may request a credit score from consumer reporting agencies that create scores or distribute scores used in residential real property loans, but you will have to pay for it. In some mortgage transactions, you will receive credit score information for free from the mortgage lender.
- You have the right to dispute incomplete or inaccurate information. If you identify information in your file that is incomplete or inaccurate, and report it to the consumer reporting agency, the agency must investigate unless your dispute is frivolous.
- Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information. Inaccurate, incomplete, or unverifiable information must be removed or corrected, usually within 30 days. However, a consumer reporting agency may continue to report information it has verified as accurate.
- Consumer reporting agencies may not report outdated negative information. In most cases, a consumer reporting agency may not report negative information that is more than seven years old, or bankruptcies that are more than 10 years old.
- Access to your file is limited. A consumer reporting agency may provide information about you only to people with a valid need -- usually to consider an application with a creditor, insurer, employer, landlord, or other business. The FCRA specifies those with a valid need for access.
- You must give your consent for reports to be provided to employers. A consumer reporting agency may not give out information about you to your employer, or a potential employer, without your written consent given to the employer. Written consent generally is not required in the trucking industry.
- You many limit “prescreened” offers of credit and insurance you get based on information in your credit report. Unsolicited “prescreened” offers for credit and insurance must include a toll-free phone number you can call if you choose to remove your name and address from the lists these offers are based on.
- You may seek damages from violators. If a consumer reporting agency, or, in some cases, a user of consumer reports or a furnisher of information to a consumer reporting agency violates the FCRA, you may be able to sue in state or federal court.
- Identity theft victims and active duty military personnel have additional rights.
States may enforce the FCRA, and many states have their own consumer reporting laws. In some cases, you may have more rights under state law. For more information, contact your state or local consumer protection agency or your state Attorney General.
For more information, including information about additional rights, go to www.consumerfinance.gov/learnmore or write to: Consumer Financial Protection Bureau, 1700 G Street N.W., Washington, DC 20552.